Testing the Information Set Perspective of UK: Financial Reporting Standard No. 3: Reporting Financial Performance

32 Pages Posted: 3 Oct 2006

Abstract

This study investigates whether a broader range of financial performance measures as required by FRS No. 3 (FRS3) provides incremental price information beyond a single earnings-based performance measure. I find that the additional performance components reported in the layered statement of performance and reconciliation of movements in shareholders' funds and alternative earnings per share that are voluntarily disclosed by UK firms are generally associated with share returns, and provide incremental price information beyond FRS3 all-inclusive earnings. This finding supports the information set perspective underlying FRS3, and has important implications for setting a global accounting standard on reporting financial performance.

Suggested Citation

Lin, Steve, Testing the Information Set Perspective of UK: Financial Reporting Standard No. 3: Reporting Financial Performance. Journal of Business Finance & Accounting, Vol. 33, No. 7-8, pp. 1110-1141, September/October 2006, Available at SSRN: https://ssrn.com/abstract=934611 or http://dx.doi.org/10.1111/j.1468-5957.2006.00595.x

Steve Lin (Contact Author)

University of Memphis ( email )

Memphis, TN 38152
Memphis, TN usa 38152-3370
United States
38152 (Fax)

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